ABU DHABI: National Bank of Abu Dhabi (NBAD) reported net profits of AED 5.232 billion for FY’15, down six per cent versus FY’14. This represents diluted EPS of AED 0.95 for FY’15 versus AED 1.02 for FY’14.
In 4Q’15, net profits of AED 1.036 were down 25 per cent year-over-year and 22 per cent sequentially. Net impairment charges increased as the Bank set aside a further AED 219 million as collective provisions to ensure an adequate buffer is maintained for future contingencies.
Results reflect underlying growth in key businesses, which were offset by the continuation of challenging market and liquidity conditions.
Expenses were up 10 per cent y-o-y and in line with expectations as the Bank invested in talent, operations and infrastructure. International deposits grew strongly to represent 37 per cent of the total deposits (up from 24 per cent in FY’14) which offset significant outflows in 1H’15 and contributed to the Bank’s strong liquidity position. The Bank continues to maintain a robust capital position and strong credit ratings.
The Bank’s return on equity (RoE) of 12.9 per cent in FY’15 continues to be impacted by the market challenges faced by the Bank and remains below the medium-term target of 15 per cent.
H.E. Nasser Alsowaidi, Chairman of NBAD, said, “NBAD continues to deliver solid core business performance, with our international network providing diversified funding and enhanced revenue to support our strong domestic business. The operating environment in 2015 was challenging, both in the UAE and around the world.
However, our robust capital position and ability to access liquidity from a range of sources has enabled us to continue providing the highest quality products and banking services to our customers domestically and internationally, without compromising our conservative risk profile. Our priority is to achieve sustainable, long-term business growth for our customers, shareholders and employees.
While we expect global economic volatility to continue in 2016, we are confident that we have the right resources in place to achieve our business objectives. We are prudent and conservative towards risk and expect limited cost growth in the year ahead following investments in talent, operations and infrastructure in 2015. Our long-term strategy is aimed at creating a more robust and dynamic bank that continues to support the growth of the UAE economy and facilitates the flow of trade and investment.”
Alex Thursby, Group Chief Executive, said, “Our core business and balance sheet remained resilient in 2015 in the face of a challenging macro environment. After investing strategically in branches, e-banking, products and operations, our domestic retail book significantly outperformed the market.
Our Wholesale business generated strong returns from flow products and was a key source of deposits, particularly from our international clients. The Group’s Return on Equity for the year was 12.9 per cent, which, while below our medium-term target of 15 per cent, still represents healthy profitability, especially when considering the wider economic environment.
Through conservative provisioning and by building up a strong capital buffer we have ensured the bank is on solid footing for the year ahead. In 2016, we will continue to execute our long-term growth strategy focusing on our UAE business and our target growth markets domestically and internationally.
NBAD is in a competitive position with strong liquidity from our international network, a high-quality loan book and limited exposure to vulnerable sectors. As always, we will maintain our rigorous approach to risk management and cost control as we invest in core operations of the business as well as key talent. We remain confident and conservative in 2016.”
